Bitcoin falls as AI industry turmoil drives gains, analysts say initial market reaction may be overdone

Odaily Odaily report: The success of DeepSeek shows that the competition of artificial intelligence from China is becoming increasingly fierce, exacerbating people's concerns about whether the high valuation of US tech stocks can be sustained. The risk in the cryptocurrency industry is that this anxiety may weaken the broader speculative enthusiasm and undermine the boost brought by Trump's executive order supporting digital asset regulation. Rick Maeda, a research analyst at Presto Research, wrote in a report to clients that "while the cryptocurrency market remains closely correlated with the sentiment in the tech sector, periods of heightened volatility are often temporary, and the initial market reaction may be somewhat excessive." Data compiled by Bloomberg shows that the 30-day correlation coefficient between Bitcoin and the Nasdaq 100 index is around 0.67. A reading of 1 indicates synchronous asset movements, while a reading of -1 indicates inverse correlation. Charlie Morris, Chief Investment Officer of ByteTree Asset Management, believes that given the simultaneous progress of Bitcoin and large tech companies, "it is becoming increasingly difficult to distinguish between Bitcoin and large tech companies." He wrote in a report that despite the executive order and the decline in the US dollar index this year, "Bitcoin has also failed to set new highs." Some areas of the digital asset market have already fallen into a deep correction. An index tracking the top 100 digital assets has fallen more than 10% since the beginning of this year. (Bloomberg)